The Week Ahead: Gold Bulls Reawaken

Source:

"No technical points overhead as the market soars into uncharted territory."

Kitco

August Comex gold bulls rocketed the contract to a fresh all-time high Monday at $1,607.70 an ounce in morning action. The recent upside breakout from the early May-mid July sideways trading range has reaffirmed the bullish technical trends, with no technical points overhead as the market soars into uncharted territory.

Since July 1, August Comex gold has vaulted sharply higher, in an accelerated uptrend, with little to no pause or correction. Over the last nine trading sessions, the August contract has posted consecutive higher settlements.

"The most obvious and glaring thing is that the gold market has reaffirmed the uptrend on every scale. As cliché as it is—the trend is your friend—and we've just posted new all-time highs again," said Dave Toth, director of technical research at R.J. O'Brien in Chicago.

Toth added that the push to new all-time highs is "not surprising. All the May-June lateral price action was consolidative reinforcing the secular bull trend. The challenge is now what do we do? Does anyone want to buy it up there? You certainly can't sell it."

Overall, looking across the spectrum of commodity markets from a technical perspective, Toth concluded that "gold is arguably the strongest market on the board. The trend on every scale is up. You have to buy it."

With no resistance on the upside, technical traders are left monitoring clearly defined support and/or stop-loss levels on the downside.

For shorter-term traders, Toth pointed to the July 15 daily low at $1,576.00 as the key support level and or risk parameter to use for a stop-loss point. "

"Until the market falls below $1,576, the trend is up on every scale," Toth said.

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